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Sunday, April 29, 2012

Canadian families earning an “average income” spend more each year on
taxes than on the basic necessities of life, a public policy report says.

The Fraser Institute concludes that over the past 50 years, an average
family's total tax bill has increased by 1,738 percent.

Over the same period, the cost of shelter increased by 1,185 percent,
food by 518 percent and clothing by 500 percent, it said.

“Taxes
from all levels of government make up the single-largest expenditure facing
Canadian families,” said Charles Lammam, the “think tank’s” associate director
of tax and budget policy research.

The report concludes that the average family's income, at $74,233 last
year, has increased significantly over the past five decades while the average
tax bill has grown even more to $30,792 or 41.5 percent of family income.

In
1961, the average Canadian family earned $5,000 and paid $1,675 in taxes, representing
33.5 percent of family income.

The situation could get worse “unless governments take serious steps to
reduce spending and eliminate their deficits," Lammam said.

Sunday, April 22, 2012

Canada’s dollar and markets rebounded after the Bank of Canada’s announcement that the days of “cheap” money could be coming to an end.

A hawkish statement took the markets by surprise with the strong signal the central bank is considering raising interest rates later in the year due to improvements in the global and Canadian economies.

The bank for now has kept is trendsetting key interest rate at 1 percent where it has been since September 2010 while the prime-lending rate remains at 3 percent.

Bank Governor Mark Carney has suggested there will be “some modest withdrawal of the present considerable monetary policy stimulus” while keeping inflation in check.

The announcement boosted the value of the Canadian dollar by almost 1 cent U.S. to $1.01 while stock markets also rose.

News on Friday that Canada’s annual inflation rate dipped to 1.9 percent last month from 2.6 percent in February, the lowest in18 months, is expected to keep the pressure off the bank from raising rates anytime soon.

Higher interest rates are seen as a way of limiting runaway consumer debt that Carney said “remains the biggest domestic risk" to the Canadian economy.

Sunday, April 15, 2012

Security at the Canada-United States border could be at risk over a decision by the federal government to lay off 1,300 workers, a union leader says.

Guns, drugs and smuggling will increase along with longer waits, said Jason McMichael of the Customs and Immigration Union.

The Conservative government is cutting $143 million from the Canada Border Services Agency budget to rein in costs.

In all, the government wants to reduce its spending by $5.2 billion over three years and cut its workforce by 19,200 jobs.

With fewer workers at the border, “it’s going to be less safe” and could raise questions about the Canada-U.S. perimeter security deal, said union president Jean Pierre Fortin.

The goal is to improve security at the border while streamlining the flow of goods and services, partly through technological innovations that will help save money.

Information-sharing and “infobiometrics” are part of the answer to increased border security, Prime Minister Stephen Harper said.

Public Safety Minister Vic Toews’ office said the changes will make border operations more efficient by eliminating unnecessary spending and duplication while “it will remain closed to criminals and terrorists.”

Sunday, April 8, 2012

Canadians are planning more “staycations” as gasoline prices have surged and are poised to climb even higher.

Staying-near-home vacations are among ways Canadians are suggesting to conserve fuel after prices jumped about 16 cents a gallon at midweek.

The hike pushed the price of a regular gas to a national average of $1.355 a liter ($5.15 a U.S. gallon).

Industry watchers are predicting record-high prices – as much as $1.50 a liter ($5.70 a gallon) – by summer even though crude oil is less expensive this year.

Prices reached a high of $1.479 a liter ($5.62 a gallon) in Montreal; $1.44 ($5.47) in Halifax; $1.40 ($5.32) in Toronto; $1.364 ($5.18) in Vancouver; and the lowest at $1.129 ($4.29) in Edmonton, in Alberta oil country.

Reasons for the jump at the pump include switching refineries to summer gas, the changeover from producing home-heating oil, refinery capacity and shutdowns, and tensions in the Middle East oil-producing countries.

As Canada is a major oil exporter, higher prices are of some benefit but not for those who drive.

Sunday, April 1, 2012

U.S. businesses stand to cash in from the Canadian government budget that will also make everyone wait longer for retirement benefits.

Cross-border shoppers as of June 1 can bring back $200 in goods duty-free after being away for 24 hours, up from $50, and $800 after 48 hours, up from $400.

To cope with the huge number of “baby boomers” retiring, the government will raise the age to receive the “old-age pension,” now at a maximum $6,481 a year, to 67 from 65 starting 11 years from now.

Other highlights of the budget include a 10-percent funding cut, or $115 million, starting in 2014, for the Canadian Broadcasting Corp. and a reduction of $1.1 billion in the $20-billion defense budget by 2014-2015.

The government will eliminate 19,200 public-service jobs and reduce spending on programs by $5.2 billion a year.

The good news was that the current annual deficit was reduced to $24.9 billion from a projected $31 billion, with the budget’s goal to eliminate it completely by 2015-16.